SRI AND MARKETS

Marketing Issues

Many farmers using SRI methods are producing surpluses beyond household needs.
While most are selling the rice on their own without additional premiums into local
markets, a growing number of NGOs, farmer cooperatives, and private companies are
working with SRI producers to achieve a higher price, taking advantage of
increasing consumer demand for foods grown without chemicals, greater biodiversity,
and fair trade in the case of international markets.

These marketing initiatives involve the creation of viable value chains from
paddy to plate, whether the plate is in the capital or on another continent. They
include the organization of SRI farmers into producer groups for collective
purchase of rice at harvest, the development of internal control standards to
qualify for organic certification, training farmers on those standards, applying
for organic certification and where relevant fair trade certification,
working with buyers to achieve necessary quality in milling, processing and
packaging, and managing international export operations. Consumer education is
another component. Some of the more advanced SRI marketing initiatives we know
about are in Cambodia, Madagascar, India, Indonesia, Sri Lanka and Thailand.

SRI farmers growing traditional rice varieties have a unique product,
distinguished by culinary, social and health qualities, with which they can compete
in domestic and international markets and which producers in developed countries
cannot readily duplicate. Without marketing channels, this unique rice will go into
undifferentiated supply pools without attracting a premium price. Connecting SRI
farmers to markets represents an important opportunity to have a significant
economic and environmental impact on smallholder rice communities, conserve
biodiversity, and attract more farmers to adopt SRI’s beneficial
practices.

Subsistence SRI rice farmers face the same constraints as other small farmers,
including low prices, isolation, no guaranteed regular sales, poor access to urban
and export markets, lack of collective bargaining, and inadequate funding and
knowledge to create a sustainable supply chain to international markets. In the
case of rice, there is also the issue that urban consumers are generally unfamiliar
with the remarkable range of rice biodiversity. The food industry is highly
competitive and heavily regulated. Launching a new product into strongly
established markets such as in the US can take 5-10 years and requires large
up-front investments. The failure rate is high. Smallholder farmers lack the funds
and expertise needed to attempt to bridge this gap.

For these reasons, starting in 2004, CIIFAD reached out to
production partner organizations in Cambodia, Madagascar and Sri Lanka to create an
informal SRI Global Marketing Partnership, with a view to developing marketing
channels for SRI farmers. The Partnership received the
SEED Award 2005, which led to a modest grant award of $21,500 from SEED and the
Swiss reinsurance company, SwissRe, in 2006. To learn what's been happening with SRI marketing since then, see the country experiences and importer experiences sections below. [...Read more about CIIFAD's role in supporting global
marketing initiatives for rice grown with SRI methods.]

Country Experiences

Cambodia

The Cambodian Center for Study and Development in Agriculture CEDAC, with the support of the German
Development Service (DED), exported the first container with organic rice to the
US in December 2009. Farmers belonging to the Damrei Romeal Organic Cooperative
Federation, Tramkok district, Takeo Province, had produced the rice for this
export. From the federation, which covers 39 villages, about 250 farmers sold
certified organic rice to CEDAC, which was imported and distributed in the USA
through Lotus Foods.

The objective of the Natural
Agri-Product Marketing Project (NAP), which is the marketing arm of CEDAC, is
to ensure that small farmers can get higher prices for their organic products and
obtain a share of the net income, which can then be used for community
development or collective purposes. It also improves consumers' access to
healthy, organic food. The main activities and services of NAP are:

Marketing of natural (organic) agricultural products in Phnom Penh and
other urban areas;

Assisting rice farmers to organize themselves in village-based producer
groups, inter-village clusters and a national network;

Capacity building among the representatives of producer groups to enhance
their leadership and management skills and improve their knowledge about
organic farming methods, as well as marketing. Likewise they learn how to carry
out internal quality controls;

Assisting producer groups to put in place internal control systems;

Raising consumers' awareness about natural agricultural products, fair
trade and community development; and

Organizing field visits for interested consumers, building consumer
networks and recruiting student volunteers.

Currently, about 3600 families from Takeo, Kampot, Kampong Speu, Kampong Cham
Kampong Thom, Prey Veng and Svay Rieng provinces are involved in 434 organic SRI
rice producer groups. The members follow CEDAC's strict Basic Organic Standards.
During the harvest of 2007-2008 they sold around 1200 tons of rice (paddy) to
NAP. The farmers receive a price that is at least 10 percent higher than what
they would normally receive for their products. In addition, each village-based
producer group receives a share of the net income from NAP for collective use,
community development or other social or environmental purposes. In 2007, CEDAC
allocated more than 20 million riels (about US$5,000) to the community, and in
2008 CEDAC expected to allocate more than 100 million riels due to the increased
supply and higher rice price.

In addition to rice, CEDAC is working with organic vegetable, fruits, meat
from raising chickens and pigs, palm sugar, pepper and fish paste producers.
Their long-term goal is to operate NAP as stores specializing in marketing of
organic and locally produced foods. NAP now operates six retail shops in Phnom
Penh and elsewhere.

The key partners and supporters of the Natural Agriculture Products shop are
Oxfam GB, Oxfam America and DED (German Development Service). From 2007 to 2009,
CEDAC had grant support from the U.S. Department of State to expand its organic
SRI marketing initiative. This grant emerged in the framework of the SEED Award
CEDAC received in 2005. CIIFAD/Cornell University is also assisting CEDAC in
linking NAP initiatives with markets in the U.S. (such as to the rice-importing
company Lotus Food) and in Europe.

An expert from the German Senior Expert Service (SES) helped to advise NAP in
2005 and a Marketing Advisor from DED has been working with NAP since October
2006. JICA, JFPR/ADB, Oxfam GB and America, AFD, EED, GAA, ACT and LDSC are key
donors to CEDAC in building capacity of producer groups in Takeo, Kampong Speu,
Kampong Cham, Kampong Thom, Kampot, Kampong Chhnang, Prey Veng, Svay Rieng.

INDONESIA

In Indonesia, BloomAgro is the distribution channel for
the Simpatik Farmer Cooperative production and processing units located in
Tasikmalaya, West Java, and the Appoli Farmer Association in Boyolali, Central Java. BloomAgro was instrumental in helping Simpatik, which
includes 2300 farmers cultivating about 350 hectares of paddy using SRI methods,
to certify and export rice grown with SRI methods. BloomAgro is exporting rice
grown with SRI methods to the USA, Germany, Singapore, Malaysia and the United Arab
Emirates and is exploring new value-added rice products. In the USA, the rice is imported and sold by Lotus Foods, while the SRI rice going to Europe is sold under BloomAgro's Sunria brand.

Both the
Simpatik production and processing units have been certified as Fair for Life by
the international certifying organization IMO (Institute for
Marketecology), based in Switzerland. The "Fair
for Life" designation is regarded as perhaps the most stringent and difficult
to achieve in the industry due to the many social and environmental criteria. The
rice produced by Simpatik is the only rice to be certified as Fair for Life by
IMO (as of 2012). In fact, Simpatik scored higher than the norm, in large part due to the many
environmental benefits generated by farmers using SRI, such as water savings and
soil conservation. All the criteria and scores can be viewed at the IMO
website.

The Appoli Farmer Association in Boyolali achieved its IMO organic and fair trade certifications in January 2013 and began exporting to Belgium and Germany in August 2013 under BloomAgro's Sunria brand name. The fields with IMO certification also have the the national organic certification for Indonesia for selling its organic SRI rice in the domestic market. Shown at right are members of the Association preparing mixed red and white varieties in vaccum-packed bags for shipping. [Read more about Appoli and their association with Bloom Agro's Sunria brand. A Feb. 24 article from the Netherlands also tell of successful marketing of Sunria SRI rice in Belgium.]

Articles and Multimedia about Indonesia

2015. SRI - System of Rice Intensification. Sunria website. [Section about SRI in Sunria's new website. Sunia is an Indonesian company that exports organic fairtrade rice grown with SRI methods to Europe and Asia.] .See also Sunria Organic Facebook page.

MADAGASCAR

In eastern and central Madagascar in the provinces of Tamatave and
Fianarantsoa, the USAID-funded Landscape Development Initiative (LDI) project
—succeeded by the Ecoregional Initiatives (ERI) and Business and Market
Expansion (BAMEX) projects— was encouraging the development of Koloharenas
(village associations focusing on natural resource management) and SRI rice
production, working closely with Tefy Saina. In 2004, Slow Food awarded
Tefy Saina its Award for the Defense of Biodiversity for its work with
the KHs to produce traditional Malagasy red rice, called Vary Mena.
LDI’s Glenn Lines enabled the KH farmers to participate in Slow
Food’s international food fair, the Salone del Gusto, in Turin, Italy, in
October 2004. Slow Food made an in-kind equipment grant to the Hanitriala
Koloharena cooperative to help improve rice packaging and quality control.
More recently, an
article on the Slow Food for Biodiversity website has written about
their efforts to help make the traditional Dista pink rice more marketable. In
2006, with support from the SEED Initiative, CIIFAD facilitated the visit to
Madagascar of Lotus Foods to explore their interest in SRI-produced rice.

Since 2007, the US rice-importing company Lotus Foods has been working with
the Coopérative Koloharena Ivolamiarina Besarety, Amparafaravolato market
a special pink rice, called Varini Dista, named after the farmer who popularized
it. The Koloharena Ivolamiarina (KH/I) is part of the Confederation Nationale Sahavanona
Koloharena, established in 1999, as the national office for 29 Koloharena
farmer cooperatives (including 950 village-based associations and 29,000 members)
committed to increasing small-farm income using environmentally-sound farming
methods (initiated by CIIFAD). The cooperatives are concentrated along the
threatened, humid forest in eastern Madagascar.

With backstopping first from BAMEX, then ERI and since early 2009 from the
French-funded Projet BVLac Alaotra as well as US Peace Corps volunteers and the
volunteer organization AVSF - Agronomes et Vétérinaires Sans
Frontières, Lotus Foods imported to the US the first container (about 18
tons) of milled pink rice or “Varini Dista” in early 2009. The
farmers in the KH also received some modest grant support from the Better U
Foundation in 2009 to purchase weeders, organic fertilizer and other simple
implements. This raised production by more than 50%. Lotus Foods imported a
second container in early 2010 and is working with the KH and Ecocert on organic
and fair trade certifications. The rice is sold in the US under the Lotus Foods
label as Madagascar Pink Rice. (See video by Lotus Foods)

OTHER COUNTRIES

The Surin Farmers Support (SFS) in Thailand, now
the Community for Agroecology Foundation (CAE) export fair trade, organic rice
internationally through several partners. SRI methods are commonly used for seed
multiplication, although the regular crop, grown largely on rainfed paddies, is
not yet grown extensively with SRI..

Of course all countries that grow rice market some of their rice in their
domestic markets. However, other than those countries noted above, we do not know
of many that are marketing their rice specifically as rice grown with
SRI methods. A 2007 study
published by Oxfam Australia, however, documents attempts to market rice
produced with SRI methods in Sri Lanka. We have no further information of
follow-up on the study at this time.

Importer Experiences

LOTUS FOODS

Lotus Foods is a California-based
rice importing company established in 1995, which uses fair-trade premiums to
support sustainable and organic production of heirloom and specialty rices by
small family farmers around the world. In the US, Lotus Foods rice products are
distributed nationally in four classes of trade, namely retail, wholesale, food
service and restaurant. They have become widely known for introducing American
consumers to Bhutanese red rice and their signature product black
“Forbidden Rice” from China, pioneering improved awareness of the
world’s wealth of rice biodiversity. Since being approached by CIIFAD about
SRI in 2005, Lotus Foods co-owners and co-founders Caryl Levine and Ken Lee, have
made a commitment to link SRI farmers to the global marketplace as a way to
provide incentive for farmers who have adopted the innovation, with all its
social and environmental benefits, and to bring consumers healthier, more
nutritious rice choices.

Lotus Foods is the first company to export SRI-grown rice to the US with the
express objective of drawing attention to the benefits of the growing
methodology. Lotus Foods works directly with the farmer cooperatives
(Madagascar), NGOs (CEDAC in Cambodia) or
enterprises (like BloomAgro in Indonesia),
that are supporting local farmers in SRI production. As none of the in-country
partners had any previous experience with international export, Lotus Foods
has played an important capacity building role, and has helped catalyze demand
for organic and fair trade certified rice in those countries.

The three SRI rices imported by Lotus Foods were featured at the 2009 and 2010
Natural Expo West and the 2010 Fancy Food Show, capturing industry interest for
both the quality of the rice and the environmental benefits of SRI. Currently,
the SRIrices are available in bulk only, but will start selling in one-pound
retail bags in 2011. Many natural food stores nationwide, and Whole Food stores
on the West Coast already feature the SRI rices. A more detailed description of
the three SRI rices can be found on the Lotus Food website. During January 2013, Lotus Foods rolled out "Heat and Eat" microwaveable rice bowls (ready in just 60-90 seconds) made with Cambodia and Indonesia rice grown with SRI methods.

Lotus Foods is a member of the Clinton Global Initiative (CGI) and Social
Venture Network. (Go to
CGI commitment site and enter “Lotus Foods” in the partner box to
see their commitment.) On September 23, 2010, Ken Lee (shown at right with Bill
Clinton) joined a plenary session on strengthening market-based solutions at the
annual meeting of the Clinton Global Initiative (see video). Caryl Levine presented during the CGI Scaleable Ideas session on September 23, 2014, with a request to help fund rice mills together with the NGO CEDAC in Cambodia (see video).

During 2014, Lotus Foods' Caryl Levine won the Specialty Foods Association's Leadership Award in the "vision" category for their promotion of SRI. Lotus Foods was also among the companies in the food sector, leading and pioneering
efforts to promote conservation and sustainable use of biodiversity, who were
honored with Biodiversity Awards on November 16, 2010. The Union for Ethical
BioTrade (UEBT) and United Business Media (UBM) awarded Lotus Foods an honorable
mention at a ceremony held at the Health Ingredients trade fair in Madrid, Spain,
for giving farmers a reason to use and protect traditional varieties by bringing
them to the marketplace.

Articles and Videos about Lotus Foods

Video: 2014 (September 23, 2014). Scaleable Ideas: Pitching for Partnerships. 1:23:00 min. Produced by Clinton Global Inititive on Livestream.com. [Caryl Levine, who imports SRI rice through Lotus Foods, is featured 8:30-25:50 minutes of this hour+ video. She was one of the speakers presenting scaleable ideas to donors at this session that was part of the Clinton Global Initiative's 10th Annual meeting, Sept 21-24, 2014. Her project was rice mills with CEDAC in Cambodia.]

2010.
Winners of biodiversity awards revealed. Union for Ethical
Biotrade website. November 17. [Press release in which Lotus Foods is
receives honorable mention at the biodiversity awards for companies in the food
sector leading and pioneering efforts to promote
conservation and sustainable use of biodiversity. This article is also on
PR Newswire and the
the Lotus Foods Facebook page]
the leadership category was awarded to Lotus Foods